Detroit Wants $1.44B Pension Finance 'Scam' Voided

Law360, Los Angeles (January 31, 2014, 9:53 PM ET) -- The city of Detroit asked a Michigan bankruptcy judge on Friday to nullify “disastrous” financial transactions behind $1.44 billion in bonds sold to investors, saying the deals were illegal under Michigan law and hastened the city’s insolvency.

The city filed suit against the Detroit Police and Fire Retirement System Service Corp. and the Detroit General Retirement System Service Corp., along with their associated trusts, seeking to end the controversial deals that were intended to raise money to meet the city’s obligations of its two principal retirement...